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Informist, Friday, Aug 23, 2024

By Apoorva Choubey

MUMBAI – The Nifty 50 could test the psychologically important 25000-mark next week as indicated by the buying in the index's call options of the August and September monthly series. The sentiment remains upbeat in global equities as hopes of an interest rate cut by the US Federal Reserve at its next policy review in September have gathered pace in recent days. Eyes will now turn to Fed Chairman Jerome Powell's speech at the economic symposium in Jackson Hole, Wyoming, later today.

Traders bought the 25000 strike price call option of the Nifty 50 aggressively and the strike remains the most actively traded. It also has the maximum open interest among all call options across both the August and September series. 

The benchmark index closed higher for the seventh straight session today, tracking gains in several other Asian markets. Recent data in the world's largest economy has fuelled optimism that the Fed will have to cut rates sooner than later, which is a positive for global liquidity and risky assets such as emerging market equities.

Today, the 50-stock index closed at 24823.15 points, up 11.65 points or 0.1% from the previous close. The August futures of the benchmark closed at a premium of 31.50 points to the spot index. Open interest in the contract jumped over 6% to 11.2 mln, according to provisional data.

The Nifty 50 continues its pattern of higher highs and higher lows on the daily chart, while every dip in the smaller time frames was met with buying, reflecting strong bullish momentum, noted Om Mehra, technical analyst at SAMCO Securities. 

Put writers remain active in the index's monthly series, as the uptrend is expected to sustain, believe derivatives analysts. Foreign investors have also added bullish bets in index futures, they said. 

However, some experts have warned that gains could be limited, as suggested by the selling in deep out-of-the-money call options of the index. "We are of the view that the short-term market texture is positive but due to temporary overbought conditions we could see range bound activity in the near future," said Amol Athawale, vice president of technical research at Kotak Securities.

--Nifty 50 Aug closed at 24854.65, up 14.20 points

--Nifty 50 Sep closed at 24970.00, up 3.75 points; 146.85-point premium to spot index

--Nifty 50 Oct closed at 25099.50, up 11.90 points; 276.35-point premium to spot index

HDFC Bank, InterGlobe Aviation, Tata Motors, Reliance Industries, ICICI Bank, Dixon Technologies, Vodafone Idea, Bharti Airtel, Bajaj Auto, Hindustan Aeronautics, Infosys, Amuja Cements and Tata Consultancy Services were among the most actively traded contracts.  End

Edited by Akul Nishant Akhoury

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